January 30, 2004 - The Department of Environment and Natural Resources (DENR) is set to file an appeal on the Supreme Court Decision nullifying certain provisions of Republic Act No. 7942, otherwise known as the Philippine Mining Act of 1995, and its implementing rules and regulations.

In a 95-page decision issued Tuesday, January 27, 2004, the Supreme Court declared Sections 3(aq), 23, 33 to 41, 56, 90 and the second and third paragraphs of Section 81 of RA 9742 as unconstitutional. All provisions concerning the Financial or Technical Assistance Agreement (FTAA) and other permits that can be granted to foreign corporations such as the exploration permits, mineral processing permits have been nullified. The decision also declared the FTAA of Western Mining Corporation (Philippines) as void.

“The Supreme Court decision will adversely affect the government’s revitalization program for the minerals industry. Specifically, it would impact on several investment projects that are being funded by foreign companies due to limited local capital,” Mines and Geo-sciences Director Horacio Ramos said.

Likewise, Ramos said, the SC ruling may threaten both existing and proposed minerals development projects with foreign participation, such as the Palawan Nickel Processing Plant, Rapu-Rapu Polymetallic Project and the Masbate Gold Project. These projects, along with others in advanced stages of exploration, including closed mines that will be re-opened into commercial operation in the next ten years, are estimated to bring in US$5 billion in total potential investments, according to him.

“The decision of the Supreme Court sends a negative signal to the international investment community that may further drag down the competitiveness of the country’s minerals industry,” Ramos stressed.

The MGB chief also stressed this could adversely affect the whole minerals industry because in nullifying Section 90 of RA 7942, the SC decision has, in effect, scrapped the whole section on incentives that not only applies to the FTAA but also covers mineral production sharing agreements (MPSAs), joint venture agreements (JVAs) and co-production agreements (CPAs) for Filipino corporations.